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A guide to car insurance excess

How your voluntary excess can reduce the cost of your car insurance

Confused about the difference between compulsory and voluntary excess? Take a look at our quick guide to car insurance excess.

What is car insurance excess?

Car insurance excess is the amount you are expected to contribute towards the cost of any claim you make following an accident.

When you damage your car in an accident, the insurance company will expect you to pay towards the overall cost of the repairs.

So if the damage to your car costs £1,250 and your excess is £250, then you pay £250 towards the repairs and the insurance company pays the remaining £1,000.

Different types of car insurance excess

There are two types of car insurance excess – compulsory and voluntary. If you make a claim, you need to pay both the compulsory and the voluntary amounts.

Compulsory excess

As the name suggests, this excess is non negotiable and is set by the insurer. It is the minimum amount your insurance company expects you to pay towards vehicle repairs or personal accident claims.

The compulsory excess varies from one person to another and depends on:

Your age

Your driving experience

The type of car you drive

Previous insurance history and any driving convictions

Insurance companies impose a compulsory excess to stop drivers claiming for every small dent and scratch. If there were no minimum amount to pay, there would be many more claims and insurance premiums would rocket up.

By imposing a minimum compulsory payment, insurance companies make sure they only deal with the more costly and serious claims, for which car insurance is really intended.

Voluntary excess

Voluntary excess is the amount you choose to pay towards the cost of a claim in addition to the compulsory excess.

So, if you have a compulsory excess of £150 and you choose to pay a voluntary excess of £200, you'll pay out a total of £350 towards the cost of repairs. Your insurance company will cover the rest.

Windscreen excess

This is a reduced amount of excess you pay to get windscreen chips repaired.

Insurers recognise that it's important to get your windscreen repaired before it cracks completely and becomes more of a hazard, so they reduce the overall excess for this type of repair.

Why should I pay the 'voluntary' excess?

It may sound a bit counter-intuitive to volunteer to pay extra, but it could work out cheaper for you in the long run.

If you're a careful driver who rarely makes a claim, increasing your voluntary excess could result in lower annual insurance premiums. And because you drive carefully you're less likely to need to pay out this voluntary amount.

So it's a calculated risk that you offer to pay out more if you do have an accident, in the hope and expectation that you won't need to make a claim.

However, if your excess is very high and you have an accident that results in significant repairs to your car, you could find yourself paying out for virtually the whole cost of the repair. Or not even bothering to make a claim if the repair is less than your excess.

If you're a careful driver who rarely makes a claim, increasing your voluntary excess could result in lower annual insurance premiums.

Do I still pay the excess even if the accident wasn't my fault?

Initially, you will be asked to pay the excess, but if your insurance company can reclaim the cost of repairs to your car from the other driver involved, you will be refunded. Sometimes, if the other driver is refusing to accept responsibility for the accident, this can take time.

LV= offer optional motor legal expenses that may help you recover your excess if there is a dispute.

Making a claim

With LV= any excess you need to pay is paid directly to the garage if you've used one of our recommended repairers to get your vehicle back on the road.

If your car cannot be repaired and is written off, we will get an engineer to value it. When you've agreed the valuation, we take the excess off the value of the car and reimburse you with the balance.